OECD Sets Low Bar For U.S. Growth

Tuesday, 03 September 2013 04:35

According to the New York Times, the OECD sees both Japan and the United States as growing at "encouraging" rates this year. The article reports the OECD expects the U.S. economy to grow at a 2.5 percent rate in the third quarter and 2.7 percent in the fourth quarter. This would bring the growth rate for the full year to 2.2 percent. That is roughly equal to the economy's potential growth rate, which is usually put between 2.2-2.4 percent. That would mean the country is making up no progress in reducing an output gap that the Congressional Budget Office puts at 6.0 percent of GDP.

By contrast, Japan is projected to grow by 2.9 percent this year. This is considerably faster than Japan's potential growth rate since it has a shrinking population and labor force. Japan's 3.8 percent unemployment rate is already below the 4.3 percent figure that the OECD puts at Japan's structural rate of unemployment.

deeper into the "report": "...But the assessment of the jobs market was notably somber. Unemployment, currently at high levels across the developed world, could become entrenched, the O.E.C.D. said, ...with the potential to 'remain even as the recovery takes hold'"

perhaps of some interest: this statement is *repeated* -- verbatim -- at the end of the NYT article with the addition of: "...The problem of long-term joblessness is best addressed by better training policies, as well as tax reforms to increase work incentives...(with) the prospect that growth will remain slow over the longer term..."

continuing *good-news* for the 1%, not so much for everyone else...

what is the remaining likelihood that this summary and list of recommendations will get a review, a response and an action plan by the Team of Economic Advisors in the Obama White House?

sigh....

didn't think so either...

+0

john boehner sets low bar for being considered intelligent...written by jim,
September 03, 2013 1:17